One notable theme evident throughout the coronavirus lockdown has been ‘back to basics’ with people displaying an increased appetite for the simpler things in life. While not everyone has fully embraced Tom and Barbara’s ‘Good Life’ philosophy, home baking, gardening and knitting have all enjoyed a notable renaissance.
Back to basics has also become a key personal finance theme. The economic impact of the pandemic has clearly resulted in many people’s finances becoming severely stretched. As a result, a significant proportion of consumers have sought to change their financial habits by reducing expenses and becoming more mindful spenders.
Dealing with debt
While good budgeting skills have become a necessity, it’s also important not to ignore debt. Many have benefited from mortgage and other debt payment breaks, but these will not last forever. Going forward it’s vital to keep up with repayments or, if you are struggling, consult a debt adviser. When it comes to lingering debt, the worst thing anyone can do is nothing.
Sadly, for some people, the pandemic has highlighted the fragile nature of their financial safety net. The last few decades have seen the burden of responsibility increasingly shift from state to individual, which has increased the importance of protection products in order to maintain both your and your family’s financial security in uncertain times.
Rainy day funds
The pandemic has also highlighted the need for emergency savings. If you don’t have any, regular savings schemes can be a particularly good way to accumulate rainy day funds. If you do have savings, make sure you shop around for the best available rates rather than leaving funds stagnating in poorly paying accounts.
Although it’s extremely easy to focus solely on short-term financial needs, it’s also important not to lose sight of other financial goals. While finding money to fund longerterm plans such as retirement savings can be difficult, the cost of delay can ultimately prove even more expensive.
Help at hand
The last few months have shown we never really know what’s around the corner and also demonstrated the importance of being financially prepared for what may lie ahead. If you need assistance strengthening your financial resilience, please get in touch.